Tools for risk management

Risk management is of vital importance in all systems for the creation and protection of value, but it also helps to improve process performance, encourages innovation, and contributes to the achievement of established objectives, and continuous improvement.

According to ISO 31000, the international standard for risk management states that risk management is the "Systematic application of policies, procedures and management practices to the activities of communication, consultation, context setting, identification, analysis, evaluation, treatment, monitoring, control and review of risk".

To carry out risk management that can be integrated into the life cycle of a system, it is necessary to be under the regime of a general framework, where there must be a commitment of all the parties involved. Once this commitment has been made, the next step consists of having an overview of all possible risks:

1. Identify the risk.

2. Analyze the risk.

3. Evaluate the risk.

Now, what are the tools you can use to identify, analyze and evaluate risks? Some of the most commonly used are:

Identify Risks:

● Brainstorming:

o Allows you to find new points of view from everyone on the team.

o Good tool to unlock inventiveness.

o Needs to have a moderator, a number of participants (no more than 15), and a certain amount of time otherwise it can get out of control and get nowhere.

o It is very important to be open to listening and not to criticize other ideas.

● Structured or semi-structured interviews.

o Interviews are conducted with specific or general questions to respond to certain problems or, in this case, existing risks in processes performed by the personnel.

o Each person answers differently to each question so it helps feedback from each department.

● Human reliability analysis

o Serves as input for probabilistic risk analysis and is developed in the following phases; problem definition, task analysis, human error identification, graphical representation, quantification, and impact assessment.

Analyze Risks:

● Hazard and Operability Study - HAZOP:

o Is adequate at the design and operation stage. Evaluates causes and possible consequences of deviations in all units of the process.

o Should be performed with a multidisciplinary team.

● Pareto charts:

o Allows classifying errors, problems, or defects that imply a risk in the system.

o Its principle stipulates that: "80% of the problems can be solved if 20% of the causes that originate them are eliminated". This means that with this chart that 20% of the causes are eliminated.

● Cause and effect analysis:

o Also known as the Ishikawa diagram or fishbone chart.

o It is a schematic technique used to reveal the possible situation of different quality problems since it is capable of handling large amounts of information.

o The search for the root cause of the problem must be performed, once the problem is identified the question, "Why?" is asked until the appropriate answer to the identified problem is found.

● The 5 whys

o The search for the root cause of the problem must be performed, once the problem is identified the question, "Why?" is asked until the appropriate answer to the identified problem is found.

o It is not necessary to ask the question 5 times, it can be less or more, but it is called 5 why's as it represents the philosophy of the system to not stop questioning until the solution is found.

Assess Risks:

● Root Cause Analysis:

o It is a problem-solving method that attempts to prevent the recurrence of a problem or defect by identifying its causes.

o The problem is established, the problem is understood, it is analyzed to find its causes, measures are taken to solve the problem and continuous improvement is carried out.

● Failure Mode and Effect Analysis (FMEA):

o It is one of the most widely used risk management analyses due to its versatility to be applied to different types of Systems. Processes and Products.

o It can be applied to risk management in design and process.

o It allows to determine the causes and effects that produce these failure modes, as well as to evaluate their severity, occurrence, and detection, establishing a risk priority index, whose objective is to prioritize the most relevant causes on which the necessary corrective actions will have to be determined and implemented.

o It allows the detection and elimination of problems systematically and completely.

o FMEA has the advantage that it is one of the most complex tools for risk management since it involves the identification, analysis, and evaluation of risks.

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